UPDATE 1-Bollore battery share offer harnesses electric-car optimism

Thu Oct 17, 2013 9:29am EDT

By Laurence Frost and Matthieu Protard

PARIS Oct 17 (Reuters) - A flotation of French battery maker Blue Solutions may value the loss-making company at up to 418 million euros ($564 million), its owner said on Thursday, signalling growing investor appetite for electric-car technology.

Bollore group, which is controlled by French industrialist Vincent Bollore, said it had set an indicative offer price of between 12 and 14.50 euros per share for the company that makes batteries to power cars.

Sales of pure electric cars have so far been sluggish, with many consumers deterred by the limited distance they can travel between charges. But despite the slow start and high-profile failures, the technology is attracting more attention as more mainstream brands join the fray and successful startups emerge.

Bollore group, which announced the plan to float 10 percent of the company last week, said the sale of 2.88 million shares would value Blue Solutions - which lost 22.4 million euros last year on sales of 61.7 million - at between 346 million and 418 million euros.

"The overall price tag looks quite high and the business model remains risky," said a Paris-based fund manager who holds some Bollore shares. "But if you believe electric cars have a strong potential and Blue Solutions could catch fire, then it's not too expensive."

The flotation, in which the Bollore group and its affiliate Bollore Participations will each offload part of their holdings in the company, follows September's announcement of an electric-car partnership with French carmaker Renault.

Faced with tougher environmental regulation and consumer demand for fuel-efficient cars that emit less carbon dioxide, automakers are investing heavily in electric vehicles and hybrids, which combine a conventional combustion engine with a battery-powered transmission.

Electric sports car maker Fisker, its battery supplier A123 Systems and Better Place, a California-based recharging infrastructure operator, have all gone bust in the past year.

Renault and Japanese partner Nissan have invested 4 billion euros in electric cars, but sales have lagged far behind forecasts, with around 100,000 delivered to date.

Chief Executive Carlos Ghosn has acknowledged his carmarking alliance's 1.5 million sales goal for 2016 will be missed.

However, other major manufacturers are moving into the technology. BMW unveiled its carbon-fibre i3 mini earlier this year along with plans to follow up with an i8 sports car.

Tesla Motors, the U.S. electric carmaker founded by PayPal billionaire Elon Musk, is now worth $22.3 billion - nearly half of General Motors or one-third of Ford's market value.

Shares in Bollore group, which have risen about 47 percent this year, were up 0.55 percent at 380.90 euros as of 1209 GMT on Thursday.

Its Blue Solutions business uses lithium-metal-polymer technology rather than more common lithium-ion cells and also makes power storage stations for solar and wind farms.

Bollore is behind the separate Paris electric car-sharing programme, Autolib', which the company hopes to export to major cities overseas, starting in Asia. Its recharging stations dotting the French capital have won about 100,000 clients since the service launched in late 2011.

"Energy is at the heart of the challenges to economic growth worldwide," billionaire Bollore said in documents accompanying the Blue Solutions offer. The listing on the Euronext exchange will raise the company's profile and help its growth "in a market that is particularly crucial for the immediate and medium term", he said.

Last month Bollore group announced a deal with Renault to bid for electric car-sharing contracts and assemble battery-powered vehicles in France.

Bollore, 61, has declared ambitions to transform Blue Solutions into a company with 1.5 billion euros in annual sales and a 400 million euro operating profit in 2022, after breaking even next year.

Financial details supplied with the offer prospectus suggest an enterprise value of between 2.4 and 2.5 times forecast 2017 sales, according to Reuters calculations.

By comparison, Tesla is trading at a multiple of 7.6, while most traditional mass carmakers and South Korean battery giant LG Chem are closer to 1.

A lawyer by training, Vincent Bollore has become rich by taking stakes in troubled companies, building a multi-billion euro conglomerate out of the family's paper mills in Brittany, western France.

Bollore is also the biggest shareholder in advertising agency Havas and media group Vivendi, where he was appointed vice-chairman last month following a boardroom tussle as the group considers spinning off its SFR telecoms unit.

The Blue Solutions offer period will run from Oct. 17 until Oct. 28, with final pricing set on Oct. 29 and trading to begin the next day.

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